2.1.3 Under a typical PPP-DBFO project, the private sector is engaged to perform a wide range of functions, including:
a) Design (D): The private partner designs the facility according to the output specifications set by the public sector. As far as possible, the public sector should not be prescriptive on the design, and should only set minimal input specifications on how the facility is to be designed.
b) Build (B): The private partner constructs the facility.
c) Operate (O): The private partner can provide ancillary and/or core operations services.
i. Ancillary: The private sector maintains the facility and provides non-core functions, such as cleaning, security, transport, etc.
ii. Core: The private partner delivers the core public service that the facility was built for (e.g. operating a desalination plant to provide potable water).
d) Finance (F): The private partner raises the money through e.g. bank loans, bonds and equity to finance the upfront cost to design and build the facility.
e) Own (O): Ownership of the land and PPP facilities thereon often resides with the private partner for the duration of the contract. There are, however, cases where ownership of the land and PPP facility thereon resides with the public sector even though the private partner finances it. Ownership of the land and PPP facility thereon generally has little influence over the performance of the private partner, since the private partner's profitability is affected by the payment stream from Government or the users and not by its ownership of the facility.
2.1.4 In a DBFO project, the private sector does not have to undertake all the operations related to delivering a service. The private sector will only provide the services that it is more efficient and competent at performing.
2.1.5 As an example, in schools or hospitals PPP, the private partner may only construct the facilities and provide ancillary services such as catering, laundry, waste management, security, transport and maintenance services, while core education and healthcare services may continue to be provided by the public sector.
2.1.6 There are also DBFO projects where the outputs can be clearly defined and measured, and thus the private provider can be involved in delivering more services. For example, for PUB's DBFO desalination plant, the private partner will not just design, build and maintain the plant, but also operate it to generate water output.